NatSemi makes loss and IBM didn't help

Halla claims company returning to profitability

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National Semiconductor made a net loss of $48.6 million on revenues of $510.1 million for Q2 of its 1999 financial year but said that it was encouraged by some buoyancy in the market. In the equivalent period last year, it made a net profit of $28.9 million on turnover of $719.9 million. In the period, it had to pay IBM nearly $50 million to terminate its Cyrix foundry agreement, as exclusively revealed here which had a big effect on the results. Brian Halla, CEO of NatSemi, said that its Cyrix division did better than expected and has contributed towards the company's return to profitability. In the quarter, NatSemi moved its Cyrix chip fabrication from Big Blue to its own .25 micron manufacturing plant, and Halla said that the removal of the IBM competition, as well as better acceptance of its processor as an alternative to Intel parts, had improved opportunities in the market. Halla said that its market share of the sub-$1,000 market had risen from 7.7 per cent to 12.9 per cent, according to figures from Mercury Research. And, also revealed here earlier, Cyrix has captured a third of the retail sales for desktop chips in the sub-$800 segment in the US. Those movements are at the expense of Intel. Quarterly orders improved by 12 per cent over its first financial quarter of 1999, with bookings equalling billings. "While we enjoyed the recent strength in new orders, we remain cautious concerning holiday impacts on our traditional businesses during the third quarter," Halla aaid. "Increasing design wins of our Cyrix processors may, however, provide an offset to this traditional seasonal weakness." ® Intel, AMD and Cyrix are not investors in The Register